Ripple's Blockchain technology has been seen as an innovation with many perspectives in it. Recently it has also been recognized as an incentive for Islamic finance. The fact is that more Islamic financial institutions around the world are considering blockchain technology in general (not just that of Ripple) as the way forward. These institutions consider it a tool for sharia that can help promote cross-border payments, financial inclusions, tax reduction and help in the administration of Sharia certifications.
Islamic start-ups do not seem to be content with traditional banking systems and therefore are looking for better ways to grow with innovative technologies.
The blockchain technology like Ripple's offers today better changes in the financial sector, and has become a cue to Islam to support innovations. The acting director general at the Shariyah Review Bureau and the general director of the Shariyah Review Bureau, Mansoor Munir, said:
"When we talk about technological or economic innovation, for example, Islam strongly recommends proposing solutions to help solve the problems faced by humanity ".
It is important to note that the Islamic finance industry lacks many perspectives and faces problems that can probably only be solved with blockchain technology. These problems include contract termination and sharia-compliant validation. However, many industry experts are happy with the addition of blockchain technologies, such as Ripple.
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Subsequently, many Islamic banks and financial institutions are aiming to use blockchain technology and a financial company that is headed by Al Rajhi Bank – one of the most important Islamic banks in the world today. Rajhi Bank is known as the first Islamic bank in Saudi Arabia to use blockchain technology and executes thousands of transactions every day.
The bank stated through one of its spokespersons:
"Rajhi Bank is betting big on technology. Blockchain is just an initiative that fits into our digital growth strategy. "Al Rajhi has become global since its first success with the use of blockchain technology last year."
In order to promote its cross-border transactions, Al Rajhi collaborated with Ripple and benefited from Ripple's blockchain technology. Meanwhile, Ripple's global infrastructure chief, Dilip Rao, said that,
"Distributed Ledger technology offers a more collaborative and democratic platform that can reduce costs and extend the reach of financial services to both the banking and non-provisional sectors of the global economy."
The use of blockchain technology in the Middle East is a big boost and can help the financial sector of the region, due to the level of remittance payments that enter and leave the region.
According to an investigation by the First Bank of Abu Dhabi, total remittance expenses in 2016 were over $ 100 billion and since then the total costs of these payments have remained extremely exorbitant. Relevant to this, Rao said that banks in the Middle East could use Ripple's technology to promote their low-cost remittances and transactions.
Ripple and other blockchain technologies will not only promote remittance payments, but will also solve the problem of validity, and Munir (general director of the Shariyah Review Bureau) explained that blockchain technology will be used to solve the problem of fakes fatwa and other Sharia certificates.
There is no doubt that the blockchain will increase the financial systems of Islamic banks and other financial institutions. Ripple as a cutting edge technology to play this role will help reduce the hassles of cross-border transactions in Islamic finance.
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